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KNOXVILLE, Tenn. — Faced with the lowest cattle prices since 1978, Tennessee cattle producers are struggling and some may not survive, a University of Tennessee economist said Friday.

“No doubt we will see some Tennessee cattle producers go out of business during this downturn,” said Emmit Rawls of UT’s Agricultural Extension Service.

“Those operating on borrowed money may not be able to withstand the low prices.”

But Rawls said Tennessee is more fortunate than some cattle-growing areas because many of the state’s cattle producers are part-time farmers who hold a job in town or have other agricultural enterprises.

Cattle prices have been driven low mainly because of higher feed-grain prices, Rawls said. Most Tennessee cattle farmers sell to buyers who feed the cattle to market weight.

“When the grain they feed the cattle is expensive, they can’t afford to pay producers as much for cattle,” he said.

The U.S. cattle industry’s biggest inventory since 1990 is another factor contributing to low prices at the farm and the supermarket meat counter, Rawls said. Retail prices bottomed out in April, he said. The inventory probably will peak in January and begin declining.

“We need two or three things to happen to improve cattle prices (at the farm), Rawls said. “We need a large corn crop to drive grain prices down; we need to reduce the size of the cattle herd; and we need to stimulate exports.”

Rawls said it normally takes 3-5 years to work out of a price slump. Prices have been declining since 1994.

Contact: Emmit Rawls (423-974-7271)